Archive for
March, 2010

News has just come through that Volvo is finally going Chinese after months of speculation.

It has just been formally announced that the other iconic Swedish car maker has been sold by its current owner- The Ford Motor Company- to Geely of China, but at a huge loss to Ford.

They purchased it twenty years ago for nearly ten billion dollars, but will collect just over four billion dollars from Geely, and they have suffered some huge losses in the interim.

Due to Chinese red tape the deal is unlikely to be completed for several months, but all but $500m will be paid in cash to Ford, who will be grateful for the cash injection.

This sale follows on from Ford’s disposal of Jaguar and Range Rover to Tata of India, and GM’s sale of Saab to a consortium headed by Spyker Cars.

“We are pleased to have reached this agreement with Ford, enabling us to safeguard and strengthen Volvo’s renowned brand heritage,” said Geely Chairman Li Shufu in a statement issued overnight. “This transaction will ensure Volvo’s continued leadership in the premium segment, where it enjoys a global reputation for safety and environmental-friendly technologies.

“This famous Swedish premium brand will remain true to its core values of safety, quality, environmental care and modern Scandinavian design. As part of the proposed transaction, Zhejiang Geely Holdings will maintain the strong collaborative relationships that Volvo has built with employees, unions, suppliers, dealers and above all, customers.”

“Volvo is a great brand with an excellent product line-up. This agreement provides a solid foundation for Volvo to continue to build its business under Geely’s ownership,” said Ford boss Alan Mulally. “At the same time, the sale of Volvo will allow us to further sharpen our focus on building the Ford brand around the world.”